Indigenous Protests Grow as Ecuador Auctions Amazon Oil Blocks

Quito, Ecuador – Hundreds of indigenous people gathered outside the Marriott Hotel in Quito today at the VII Annual Meeting of Oil and Energy where the Ecuadorian government announced the opening of the XI Round, an oil auction in which 13 oil blocks went on sale covering nearly eight million acres of rainforest in the Amazonian provinces of Pastaza and Morona Santiago near the border with Peru.

Led by the Confederation of Indigenous Nationalities of Ecuador (CONAIE) and the Confederation of Amazonian Indigenous Nationalities (CONFENIAE) and representing seven indigenous nationalities, the group overtook the entrance to the hotel and were meet by military, police, private security forces and pepper spray. Several indigenous leaders entered the meeting and publicly confronted Minister of Non-Renewable Energy Wilson Pastor.

“CONFENIAE was never consulted about this,” said Franco Viteri, President of CONFENIAE. “Our position on oil extraction is clear: We are absolutely opposed.”

The indigenous groups have long resisted oil drilling on their ancestral lands, fearing that the arrival of extractive industries would damage their water supply and threaten their traditional way of life. Indigenous representatives criticized the government’s consultation process, a right guaranteed by the Ecuadorian Constitution, international treaties and rulings by international courts including the Inter-American Court of Human Rights. According to Achuar leader Domingo Peas, the so-called “consultation” process by the Ecuadorian government did not include indigenous participation and was not in accordance with traditional decision-making practices nor carried out in native languages.

“We say to the transnational corporations, there is no guarantee for your investments,” said Humberto Cholango, President of CONAIE. “Those who go forward will face indigenous resistance in our territories.”

For Ecuador – an OPEC-member whose oil output has hovered around 500,000 barrels per day in the past few years – the oil industry represents an important source of revenue. The country hopes to attract investments worth around $1 billion in oil exploration projects from state-run and private companies. Additionally, state-run oil company Petroecuador plans to negotiate with foreign state companies to develop three other blocks in the area.

David Martin, CEO of Gente Energy – formally of Ivanhoe Energy who has run into major trouble in Ecuador – proclaimed the small Andean country would be “the next Kuwait.”

“This is simply a bad investment,” said Kevin Koenig, Ecuador Program Coordinator at Amazon Watch. “Ecuador is selling off its last remaining rainforests and indigenous lands to the highest bidder. These are some of the most controversial blocks in the Amazon, companies must realize they are purchasing a problem that will only get worse. If there is this much resistance at the outset of the round here today, imagine what will happen if a company shows up in a community with an oilrig.”

The contested oil blocks have a long legacy of controversy. Under former President Lucio Gutierrez, Ecuador attempted to offer up many of these same blocks only to find no bidders. Two blocks were previously held by ARCO, Burlington Resources, CGC and ConocoPhillips, but indigenous resistance kept company works out, forcing the government to declare force majeure and paralyzing the projects for nearly a decade. Ultimately, Ecuador had to compensate the companies for lost revenue and the companies endured major damage to their brands.

While exploration rights for 13 blocks were put up for auction today, the government may decide to put five more blocks in the area – including those within Sarayaku and Achuar ancestral territories – up for auction in the future. Companies will have six months to present their bids, and contracts should be signed before the end of September 2013.